LNG

Petróleo Brasileiro, which was the first national oil company to import LNG to chartered floating storage and regasification units (FSRUs) back in 2009 while never developing LNG production itself, reported a 76 percent surge in oil-led net profits as the government also brought in a new tax on energy companies exporting oil.

A US government report outlines a rise in Argentina’s domestic natural gas production noted over the past three years, largely because of increasing production from the Neuquén Basin’s Vaca Muerta Shale and tight-gas play, while the nation has also started LNG exports.

“As production has grown, Argentina has resumed exporting natural gas by pipeline to neighboring Chile and Brazil and has started exporting liquefied natural gas,” said the report from the US Energy Information Administration.

Production from Vaca Muerta Shale surpassed 1.0 billion cubic feet per day (Bcf/d) in December 2018 and Argentina’s first LNG export cargo was shipped on June 6 from the offshore Tango floating liquefaction unit, according to the report.

“The growth in Argentina’s shale and tight gas production has partially offset declines in its natural gas production from mature fields,” said the EIA.

However, output from Vaca Muerta now accounts for about 23 percent of Argentina’s total gross natural gas production.

“The Vaca Muerta shale formation has technically recoverable resources of 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate within 8.6 million acres, and it is geologically comparable to the Eagle Ford shale play in southern Texas,” stated the EIA.

“Only 4 percent of Vaca Muerta’s acreage has entered the development phase so far,” the report added.

“Argentina’s domestic natural gas production exceeds consumption during warmer months, from October through April, though production is insufficient to meet demand during colder months, May through September, which requires Argentina to import natural gas by both pipeline and as LNG,” explained the EIA.

“Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns,” said the report.

“Argentina is conducting feasibility studies to identify potential natural gas storage sites,” it added.

From 1990 through 2007, Argentina was a net exporter of natural gas. Since then, Argentina has been importing more natural gas both by pipeline (mainly from Bolivia) and as LNG.

Argentina imports LNG using a floating storage and regasification vessel (FSRU) moored at the Escobar port near Buenos Aires.

In the last two years, with the growth in domestic production, Argentina has been importing LNG only during cooler months, March through October.

“Argentina will likely continue importing LNG during cooler months until additional pipeline infrastructure is built to deliver growing shale production to major demand centers,” said the US report.

“Argentina’s seasonal demand patterns, the opposite of countries in the Northern Hemisphere, allows Argentina to export LNG during months when major consuming countries in Asia are importing more LNG,” it added.

Natural gas from Vaca Muerta is transported by an existing pipeline network to the port of Bahía Blanca, where it is liquefied at Tango FLNG, a floating production barge chartered from Belgian shipping company Exmar.

“These pipelines were previously used to transport imported LNG from an FSRU moored offshore at Bahía Blanca,” said the EIA.

“Tango FLNG has an LNG production capacity of 500,000 metric tons (0.07 Bcf/d) and is expected to produce up to eight LNG-export cargoes per year,” it added.

“Future growth in LNG exports will require additional investments in onshore liquefaction facilities and pipeline infrastructure or the use of additional floating LNG-production vessels,” stated the US report.